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Roth Capital Comments on Buy-Rated Galena (GALE) Following CEO Transition

August 21, 2014 9:24 AM EDT
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Roth Capital affirms Galena Biopharma (Nasdaq: GALE) at Buy with a target price of $8 following news that the company has appointed a new CEO in Mark Schwartz, former COO of the company.

Analyst Joseph Pantginis commented, While the press release mentions that Dr. Ahn left to pursue other interests, it is unfortunate that this departure is, in our opinion, likely directly associated with the ongoing poor optics at the company. These optics revolve around 1) the company's prior involvement with the Dream Team Group, 2) management stock sales, 3) internal investigations and 4) ongoing SEC investigations into the associated stock sales and Dream Team Group involvement. All of these activities have significantly hurt the optics of the company, in our belief, but the CEO switch is an important message to the street. We have been focusing our efforts on the improving fundamentals at the company, which include 1) a growing pipeline of developmental and approved products, 2) growing revenue streams from Abstral and the anticipated addition of Zuplenz in 1Q15, 3) GALE-401 (potentially improved safer and improved formulation of Angrelide) moving into Phase II, and 4) Galena's leading role in developing immunotherapy products which include NeuVax in an ongoing Phase III study for breast cancer, a Phase II for gastric cancer and GALE-301 as a vaccine candidate for ovarian and endometrial cancer (ongoing Phase II). Additionally, Galena continues its business development activities already having signed Teva (TEVA-NC) for Israel and Dr. Reddy's in India, both for NeuVax. For 2014, the company has guided toward the lower of the $11-14 million range in Abstral sales. The Phase III PRESENT study has the desired sample size, which brings the study towards its interim analysis. The study of NeuVax and Herceptin in high HER2-expressing breast cancer patients is expected to initiate in the fall. The Phase II study of GALE-401 in patients with Essential Thrombocythemia is ready to enroll patients with the sites now open.

For an analyst ratings summary and ratings history on Galena Biopharma click here. For more ratings news on Galena Biopharma click here.

Galena Biopharma closed at $2.32 yesterday.



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